BD, India wide apart on premium rate

To settle the premium rate through amicable talks with India for importing fuel from Assam, State Minister for Power, Energy and Mineral Resources Nasrul Hamid is set to visit the neighbouring country next month.
Bangladesh and India are to fix such rate for setting up a 130-kilometer Indo-Bangla Friendship Fuel Pipeline to import 1million tonnes of diesel from the Indian firm, Numalighar Refinery Limited or NRL, owned by Bharat Petroleum Corporation Ltd.
This visit by a high-profile delegation, led by the State Minister, will take place on October 3-5, as per the  invitation Indian High Commissioner in Dhaka Harsh Vardhan Shringla had made during a courtesy call with Nasrul Hamid on Sunday.
The two countries failed to reach a consensus on the premium rate in the last one year. India is eager to settle the matter soon.
Officials said NRL sought excessive premium for the fuel export. Its demand is $9 a barrel.
"Bangladesh is hopeful of settling the rate as it wants to enhance energy sector cooperation with the neighbouring country," a highly placed source told the Daily Observer on Sunday.
Earlier on April 18-19, during a meeting in Dhaka with the NRL, Bangladesh Petroleum Corporation (BPC) suggested that the premium rate should be US$1.78 a barrel considering that 90 per cent investment came from the state-owned corporation for setting up the fuel pipeline.
At this Dhaka meeting, Bangladesh's State Minister for Power and Indian State Minister for Petroleum and Natural Gas Dharmendra Pradhan were present.
A technical team recently prepared and submitted a framework as per directive from the Energy and Mineral Resources Division to materalise the indo-bangla pipeline project.    
As per the team's recommendation, the fuel supply tenure has been estimated at 20 years between Siliguri in Assam and Parbatipur of Bangladesh.
Besides, the team recommended the rate be fixed at $5.73 a barrel if the NRL would agree on 100 percent investment in the pipeline.
Of the $5.73 premium, the BPC proposed maximum $2.70 as international premium rate and the rest $3.03 for cost recovery for the pipeline.
"BPC will be able to save around Tk 1,000 crore if its  Indian counterpart would agree on the Dhaka proposal," an official told the Daily Observer on condition of anonymity.
 He said BPC would have no loss no gain if the Indian counterpart would allow it $6 per barrel. If the tariff would cross $6:30 then it would not be feasible, the official added.    
The technical team said maximum $4 per barrel would be required to transport through railway the diesel between Chittagong-Parbatipur and Chittagong-Khulna.
The pipeline construction would require over Tk 614 crore with Tk 114 crore interest on fund mobilisation of the project.